If a bank experiences a deposit outflow of $50 million with a required reserve ratio on deposits of 10%, which balance sheet would the bank rather have initially: Balance sheet A or balance sheet B? Why? Balance Sheet A Assets Liabilities Reserves $75 million Deposits $500 million Loans $525 million Capital $100 million Balance Sheet B Assets Liabilities Reserves $100 million Deposits $500 million Loans $500 million Capital $100 million
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